Caribbean Launch of Livelihood Protection Policy

Volume 01/ Issue 01

CARIBBEAN LAUNCH OF LIVELIHOOD IN THIS ISSUE PROTECTION POLICY  Livelihood Protection Policy launches in Jamaica and Saint Lucia. The Caribbean is susceptible to a number of natural  disasters including droughts, floods and hurricanes, Increasing the resilience of vulnerable communities which due to climate change have been increasing in hand-in-hand with national disaster management both frequency and intensity. Over the last thirty year agencies. period, the region has suffered damages in excess of $5  Developing the capacities of local partners to ad- billion, with 1.5 million people being affected by ex- minister weather index insurance. treme weather events. The expected increase in the  Voices from the field - conversations with product frequency and intensity of extreme weather events champions, and policy holders. brought on by climate change will further exacerbate tional Insurance Company (JIIC) to offer the LPP in the the plight of vulnerable individuals in the Caribbean . country. This policy is currently available via the St Tho-

Continual exposure to weather-related risk reduces mas Credit Union and the People’s Cooperative Bank, in economic opportunity, exhausts financial resources the parishes of St Thomas and Portland; LPP will be and erodes the overall coping capacity of low- available island-wide by the end of the year. Speaking income individuals, leading to loss of livelihoods and at the formal product launch of the LPP in Kingston ear- poverty in the long-term. lier this month, Mrs Grace Burnett, Managing Director of JIIC remarked that the LPP product can make a sig- The Livelihood Protection Policy (LPP) provides individu- nificant contribution to the portfolio of risk manage- als, vulnerable to weather-related shocks, an effective ment strategies employed by Jamaicans to cope with mechanism to recover and recoup their losses arising as bad weather. She further stated “the core advantage a result of heavy rainfall and high wind speeds. The for clients is the fact that they do not have to make a ‘Climate Risk Adaptation and Insurance in the Carib- claim to the insurer...if weather thresholds are met, the bean’ project has partnered with the Jamaica Interna- policy is ‘triggered’ and an automatic payout is re- ceived.”

The launch in Jamaica follows the official commence- ment of the programme in Saint Lucia in May 2013, with local partner EC Global Insurance. Saint Lucia was of first of three sites to implement the LPP with the policy having been progressively rolled out over the past five months.

“It gives me great pleasure to announce our en- gagement with the German funded Munich Cli- mate Insurance Initiative (MCII) . This is our way of seeking new ways to help our vulnerable farmers build resilience, specifically against rain and wind impacts.” From L to R: Mr Don Wehby, HE Ambassador Josef Beck, Mrs Grace Burnett, Mr Courtney Campbell, Ms Sobiah Becker, Mr Isaac Anthony - Hon. Minister Pickersgill, Jamaica.

Munich Climate Insurance UN Campus T +49 (0) 228 815 0234 Initiative (MCII) e.V. Platz der Vereinten Nationen 1 F +49 (0) 228 815 0299 53113 Bonn E [email protected] hosted at Germany www.climate-insurance.org United Nations University http://ehs.unu.edu Institute for Environment and Human Security (UNU-EHS) THE LIVELIHOOD PROTECTION POLICY About Severin Francois

Mr. Francois is Assistant The Livelihood Protection Policy (LPP) is a weather- Manager, Claims & Under- index based insurance policy designed specifically to writing at EC Global Insur- help vulnerable, low-income individuals recover from ance Co Ltd. Severin has the damage caused by strong winds and/or heavy rain- over 16 years of experience fall during hurricanes and tropical storms. Targeted at in the insurance industry, all individuals irrespective of income level, the LPP pro- and is championing the rollout of the LPP in Saint vides timely cash payouts soon after a weather event, Lucia. Severin’s enthusiasm enabling policy holders to start rebuilding their lives in for the LPP stems from the the wake of a natural disaster. fact that the LPP provides a The simplicity and flexibility of the LPP makes it easier measure of security to vulnerable people who have not for people to get the level of coverage they need. In been the focus of traditional insurance. addition, the SMS-based warning system mitigates future losses by informing clients of approaching events also now doing more in the community, which in- so they can employ risk reduction strategies. Finally, creases our exposure and visibility. The product is also insurance coverage will improve the credit worthiness unique, allowing us to gain market differentiation. of individuals in the long-term, giving them access to Community benefits include, an affordable insurance financial services that they previously may not have had product for vulnerable groups, reducing dependence access to. and lengthy waiting periods for government support VOICES FROM THE FIELD post-disasters. Farmers particularly can now access insurance for their crops/livestock, preventing the Interview with Product Champion need to borrow money or stop production during re- Severin Francois, Saint Lucia covery. The LPP helps to get people on their feet again

What do you like about the Livelihood Protection Policy? quickly.

The product is outside of the traditional insurance bas- What role does EC Global have in delivering the LPP? ket, with vulnerable groups the target audience. The As the product underwriter and carrier in Saint Lucia product is a simple one. It is easy to read and under- we support the administrative process for claim pay- stand, there is a simple sign up process and the payouts and all interface with local distribution networks ment method is straight forward with no drawn out (Cooperatives and Credit Unions). This network is the claims forms. main direct service face for the LPP but individuals can What are the businesses & community benefits? also sign up for the product directly with us. We also have a strong role in stakeholder product training, and From a corporate social responsibility perspective, we building community awareness to disaster risks and are proud to be behind this product. However, we are the role that the LPP can play in reducing that risk.

STRENGTHENING CAPACITY AND MARKET STRATEGIC PARTNERS DEVELOPMENT The LPP extends the financial safety net to vulnerable, low-income individuals who have been overlooked by As the concepts of micro- traditional insurance. To ensure that the target com- insurance and weather munities are well served, it was critical to adopt a com- index insurance were new munity-centric approach to for most stakeholders of the distribution of the product. the project, the Climate This has meant partnering with Risk Adaptation & Insur- grassroots organizations that ance in the Caribbean project invested significant re- understood the needs of the sources into awareness raising activities. The work- people. In both Saint Lucia shops were aimed specifically at developing the organ- and Jamaica where the Liveli- izational capacity of local stakeholders to administer hood Protection Policy has the Livelihood Protection Policy. Through a series of been rolled out, this inclusive training courses, using a highly participatory approach, approach is being driven by insurers, the distribution channels as well as other rele- the collective efforts of all vant stakeholders from the public sectors in Saint Lucia partners, from governmental and Jamaica have developed a firm grasp on the techni- and civil society organizations, cal design and process mechanisms of the LPP. the disaster management “The training was very interesting and informative. I am agencies, right through to the local credit unions, asso- confident I can advise my clients on weather risk insurance ciations and cooperatives. how the Livelihood Protection Policy can help them. ” – Insurer from Saint Lucia

The project uses the partner-agent model for dis- tributing the LPP, under which the insurer contracts an agent to deliver, and administer the product. Thus, critical to the success of the LPP in the region is for all stakeholders to understand the technical aspects of the LPP; have a firm understanding of back office “Over the last couple of days I have had the joy of champi- processes; manage expectations and equip at-risk indi- oning the product introduction to credit unions, co- viduals with this risk transfer tool that can help them operatives and the media. I have honestly in all my years in this industry never experienced such immediate interest in cope with extreme weather events, and better respond a new product.” to the threats they may face. - Mr. Severin Francois, EC Global

role of LPP and how it can be integrated into existing Climate risk insurance can make a positive contribution documentation and longer term adaptation strategies. to decreasing social vulnerability by helping people re- The ODPEM in Jamaica has subsequently begun incor- cover from natural disasters. One of the focal areas of porating the LPP into parish level disaster manage- the Livelihood Protection Policy is building resilience ment plans, building a holistic approach to managing and enhancing adaptive capacity at the community risk. level. The LPP integrates disaster mitigation into its product design through an Early Warning system that alerts all policy holders to approaching weather events. This enables policy holders to take precautionary meas- ures to mitigate and minimise adverse impacts. Over time, the goal is to raise awareness among vulnerable communities so that they are cognizant of the risks they face, as well as actively manage these risks.

The project and its partners work closely with disaster management agencies in the target countries. The Na- . tional Emergency Management Organisation (NEMO) in

“Often after certain events occur, people are dislo- cated and are unable to put their lives back in order. A payout will give them cash they would not have otherwise had.”

- Ms Elizabeth Chung, Manager, Jamaican International Insurance Company

Munich Climate Insurance hosted at UN Campus T +49 (0) 228 815 0234 United Nations University Platz der Vereinten Nationen 1 F +49 (0) 228 815 0299 Initiative (MCII) e.V. Institute for Environment 53113 Bonn E [email protected] and Human Security (UNU-EHS) Germany www.climate-insurance.org http://ehs.unu.edu VOICES FROM THE FIELD About Elizabeth Chung Interview with Product Champion Elizabeth Chung, Jamaica Ms. Chung is the Manager of Customer Experience and What do you like about the Livelihood Protection Policy? Innovation at the Jamaica International Insurance Com- The LPP is intended to provide a viable risk manage- pany. She is responsible for ment solution of a large segment of our society who are coordinating customer ex- unable to access the same products via traditional in- perience across the company; surance. the growth and direction of the company's marketing initiatives, strategic part- What are the businesses & community benefits? nerships, emerging media platforms, brand image,

The LPP will provide many opportunities for businesses, and customer acquisition and retention. As the individuals and communities to thrive and grow. The leader for innovation and ideas (product and proc- peace of mind that insurance provides will now be ess improvement) within the company she is also available to a wide cross section of our society. Busi- responsible for the implementation of the Liveli- nesses such as the Credit Unions and People's Coopera- hood Protection Policy. tive Banks (our partners) can grow their lending portfo- lios, as they can now confidential lend to clients with LPP knowing they can continue making repayments therefore responsible for the administration of sales despite the occurrence of severe weather activities. and payouts. However, given the stage of the life cycle of the product we are working closely with our partners The community can also enjoy a greater sense of inde- in marketing and sales. We are confident that in time pendence as they will no longer be entirely reliant on we will be able to focus almost entirely on the back government agencies following such events. As families office administration as our partners are fully engaged in Jamaica also provide significant support in times of in bringing LPP to their customers and community. hardship, access to the LPP will enable a transfer of some of that responsibility for the cost of a small monthly or weekly payment. “I think this initiative has potential to benefit Saint Lucia and look forward to continue discussing ways to What role does JIIC have in delivering the LPP? strengthen this initiative”

Jamaica International Insurance Company (JIIC) is the - Dr Reginald Darius, Permanent Secretary for Finance, Govt. of Saint Lucia insurance company that underwrites the policy. We are

Elisia Marquis, Saint Lucian Banana Farmer Check out the small collection of stories about the

Has your experience of storms and hurricane changed in Livelihoods Protection Policy in the media. your lifetime? Protecting paradise against climate change - http:// The world has changed. When I was young we never knowledge.allianz.com/?2435/Protecting-paradise-against- heard much about these climate-change

types of storms, now they New weather insurance policy may protect the ‘small are becoming an everyday man’ (Jamaica) - http://www.jamaicaobserver.com/ thing. What is most surpris- business/New-weather-insurance-policy-may-protect-the-- ing is that it is happening small-man-_15238966 even when they say it isn’t JIIC makes big push into micro-insurance (Jamaica) - http:// supposed to be happening. jamaica-gleaner.com/gleaner/20131009/business/

business2.html How has this affected your income? Weather index based livelihood protection policy launches I used to make enough from my plantations, but lately I in Saint Lucia - http://microensure.com/news.asp?id=243 am earning less and less. Storms and heavy rains are Germany's international broadcaster DW features a clip impacting on my crops, causing them to become water- about the LPP in Saint Lucia - http://www.dw.de/insuring-a- logged and rot. caribbean-island-against-storms/a-17080935

What have been the impacts for other farmers? They are struggling a lot. Hurricane Tomas had a huge effect on banana farmers, with many losing their crops. Some have tried growing alternative crops, with others needing banks loans in order to replant.

How are you protecting yourself from future impacts? When I found out about the Livelihood Protection Pol- icy, I thought it sounded like a great idea and a good way to provide some extra assistance in times of need. Even having insurance I don’t want a hurricane as they NEXT STEPS are devastating for our country. I also know there is still lots of preparation I need to do to protect my crops, but Over the coming months the project will be ex- I am happy that I won’t lose everything when the next panding into Grenada, so stay tuned for further big storm hits. details.

ABOUT THE PROJECT

Developing countries located in disaster-prone regions such as the Caribbean are particularly hard hit by the consequences of global climate change. As extreme weather events increase in frequency and/or intensity, vulnerable populations are made even more vulnerable by the increased risk changing weather conditions place on their lives and livelihood.

The Climate Risk Adaptation and Insurance in the Caribbean project seeks to address climate change and social vulnerability in this region by developing weather-index based insurance solutions that help vulnerable populations cope with the adverse impacts of severe weather events. The projects is implemented by the Munich Climate Insurance Initiative (MCII) and its partners, the Caribbean Catastrophe Risk Insurance Facility (CCRIF) and MicroEnsure, with reinsurance capacity provided by Munich Re. Funding for the project has been provided by the International Climate Initiative of the German Federal Ministry for the Environ- ment, Nature Conservation and Nuclear Safety (BMU).